TUI's recovery is in disarray - shares experience a decline
In a surprising turn of events, TUI's stock has been on an upward trajectory in the midst of escalating geopolitical tensions between the US and Iran, and a significant increase in oil prices. The UK-based travel and tourism company, with a WKN of TUAG50, has shown resilience despite the usual risks associated with rising oil prices and geopolitical instability.
Last Friday, TUI's stock price crossed its 200-day moving average, breaking a long-term downtrend, reaching around €7.43 by June 30, 2025, and further advancing by 3.65% on July 1, 2025. This positive momentum continued over the past week and three months, with TUI’s stock gaining significantly (+12.34% and +16.49% respectively).
Barclays, a British investment bank, played a significant role in boosting TUI's stock price. They recently upgraded TUI's rating from "Underweight" to "Overweight," and reaffirmed a "buy" rating on the company with an €11 price target. Barclays' confidence stems from TUI's focus on low-cost carriers and short-haul European routes, which are performing well.
However, they remain cautious regarding long-haul North Atlantic routes. Barclays also recommended airlines focused on budget and intra-European travel, including TUI, EasyJet, Ryanair, and Jet2, while advising underweight positions in bigger network carriers like Lufthansa or Air France-KLM.
The positive performance of TUI's stock suggests the company and similar budget or short-haul focused operators are currently managing the headwinds of rising oil prices well, possibly through hedging strategies or strong travel demand in Europe.
However, other tourism and airline stocks may be more negatively affected if heavily exposed to longer, fuel-intensive routes or slower demand recovery. The potential pressure on larger network airlines has led Barclays to advise underweight positions.
This contrasting market view positions TUI and similar companies as relatively resilient within the tourism and airline sectors amid geopolitical and oil price uncertainties.
The escalating tensions between the US and Iran have caused international concern about a possible escalation of the conflict in the Middle East. Investors fear not only booking cancellations due to growing travel concerns but also higher operating costs due to rising oil prices.
Analyst Andrew Lobbenberg significantly raised the price target for TUI to 11.00 euros from 7.70 euros. However, DER AKTIONÄR advises investors to stay on the sidelines for TUI's stock, maintaining its assessment that the tense geopolitical situation will keep volatility high for TUI's stock.
A possible blockade of the Strait of Hormuz by Iran could significantly disrupt global oil supplies and further exacerbate the situation. The new uncertainty caused by the escalating tensions has made tourism and airline stocks like TUI and Lufthansa particularly vulnerable.
- Variations within the industry have emerged, with TUI's stock experiencing a surge in spite of widespread geopolitical tensions and high oil prices.
- Despite normal risks associated with oil price increases and geopolitical instability, TUI has demonstrated remarkable resilience.
- The positive trajectory of TUI's stock has continued over the past week and three months, with substantial gains (+12.34% and +16.49% respectively).
- Banks, such as Barclays, have played a crucial role in propelling TUI’s stock growth by upgrading its rating and setting a €11 price target.
- Aviation sector stocks, such as TUI, EasyJet, Ryanair, and Jet2, are deemed more resilient due to their focus on low-cost carriers and short-haul European routes.
- The volatility in tourism and airline stocks, such as TUI and Lufthansa, has risen due to escalating geopolitical tensions and fears of oil price instability.
